The USDA’s Foreign Agriculture Service last week revised downward its estimate of 2020/21 Mexican wheat and corn production while boosting slightly the estimate for sorghum production.
But US export prospects to fill any production gaps were muddied by a Dec 31 decree calling for a phase-out of the use of glyphosate and genetically modified corn for human consumption in Mexico. So far, Mexico has not provided details about the definition of human consumption and what, if any, corn-derived products might be affected.
CORN PRODUCTION FORECAST DOWN
The new projected corn production estimate for the 2020/21 marketing year was reduced 200,000 tonnes, or 0.71%, from 28.00 million in official USDA data to 27.80 million, based on recent data from Mexico’s Secretariat of Agriculture and Rural Development.
The new corn production estimate included the planting intentions of current 2020/21 fall/winter crop cycle, which was estimated to reach a production of 8.0 million tonnes, compared with 8.3 million registered in the same crop cycle a year earlier.
According to private sources, as of mid-December, water availability for irrigation was about 27.1% less than the level registered in 2019 at the national level, which is likely to limit corn production in this crop cycle, the FAS said.
Based on information from the National Water Commission (CONAGUA), a private consulting firm (GMCA) created a comparative table of the main dams with water available for agricultural use. For example, in the state of Sinaloa (the main corn producing state of this crop cycle), water storage in its five dams destined for agricultural use was 53.3% lower than the same date a year ago at 4,607 cubic hectometers as of Dec. 16, versus 9,897 recorded a year earlier on the same date).
That reduction in water storage availability was because of the long-term drought in northwestern Mexico, the FAS said. Therefore, even though corn planting intentions in the 2020/21 fall/winter cycle in Sinaloa are slightly higher than a year ago, government and private sources said irrigation will be limited by the drought conditions and consequently corn yields and production could be slightly lower.
WHEAT PRODUCTION SEEN LOWER
The new FAS Mexico wheat production estimate for marketing year 2020/21 was revised to 2.90 million tonnes from the USDA official number of 3.05 million. The latest SADER data included preliminary final figures for the 2019/20 fall/winter crop cycle, as well as the available official information for the 2020 Spring/Summer crop cycle.
Private sources told the FAS that wheat planted area was about 9% lower than initial planting intentions. Farmers have shifted to planting more bread wheat than their typical durum wheat because of modifications to the government’s Guarantee prices program.
CATTLE, BEEF RECAP
Fed cattle trading was reported in the Plains this week at $109 to $111 per cwt on a live basis, steady to up $1 from last week. Dressed-basis trading last week was seen at $172 to $174 per cwt, down $2 to $3.
The USDA choice cutout Thursday was up $2.29 per cwt at $221.20, while select was up $0.84 at $207.28. The choice/select spread widened to $11.63 from $11.05 with 101 loads of fabricated product and 36 loads of trimmings and grinds sold into the spot market.
The USDA reported Wednesday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.21 to $1.27 a bushel over the Mar CBOT futures contract, which settled at $5.24 1/4 a bushel, up $0.02 1/4.
The CME Feeder Cattle Index for the seven days ended Wednesday was $133.19 per cwt, up $0.38. This compares with Thursday’s Jan contract settlement of $135.87 per cwt, up $0.57.